BCG Growth Share Matrix :: essays research papers

Dublin Institute of engineering scienceMSc COMPUTING SCIENCE(Information Technology for St enumerategic Management)BCG Growth fortune MatrixResearch Assignment no(prenominal) 2The BCG Growth-Share MatrixThe BCG Growth-Share Matrix is a portfolio planning model that was certain by Bruce Henderson of the Boston Consulting Group in the early 1970s. It is establish on the observation that organisations business units can be classified into four categories based on combinations of securities industry growth and foodstuff manage congenator to the largest competitor. commercialize growth serves as a proxy for industry attractiveness, and relative market share serves as a proxy for competitive advantage. The growth-share matrix so maps the business unit positions within these two important determinants of profitability.Growth Share Matrix (http//www.netmba.com/strategy/matrix/bcg/)This framework assumes that an increase in relative market share will result in an increase in the gene ration of currency. This assumption often is true because of the experience curve change magnitude relative market share implies that the firm is moving forward on the experience curve relative to its competitors, thus bring abouting a salute advantage. A second assumption is that a maturation market requires investiture in assets to increase capacity and therefore results in the uptake of cash. thusly the position of a business on the growth-share matrix provides an indication of its cash generation and its cash consumption.Henderson reasoned that the cash required by quick growing business units could be obtained from the firms other business units that were at a more mature stage and generating significant cash. By investing to wrench the market share leader in a rapidly growing market, the business unit could move along the experience curve and develop a cost advantage. From this reasoning, the BCG Growth-Share Matrix was born.The four categories areo   &nb sp Dogs. Dogs gift low market share and a low growth rate and thus neither generate nor consume a large tot of cash. However, dogs are cash traps because of the money tied up in a business that has little potential. Such businesses are candidates for divestiture.o      apparent movement marks. Question marks are growing rapidly and consume large amounts of cash, that because they have low market shares they do not generate oft cash. A question mark has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows. If the question mark does not succeed in suitable the market leader, then after perhaps years of cash consumption it will degenerate into a dog when the market growth declines.